A working capital loan is a lump sum repaid over a fixed term. An overdraft is a revolving line you draw on as needed, paying interest only on what you actually use. Invoice financing advances money against invoices you have already issued. They solve different shapes of the same problem.
Working capital loan
Best for: a known, sizeable need with a clear repayment horizon — a season of stock, a larger order, a planned expansion of the operating base.
Shape: lump sum in, fixed instalments out. Predictable. Under the Enterprise Financing Scheme it is unsecured and capped at S$500,000 per borrower.
Overdraft facility
Best for: short, uneven, unpredictable gaps. The week payroll lands before a big receivable does.
Shape: a revolving line attached to your operating account. You pay interest only on what you actually draw, which makes it efficient for irregular use and expensive as a permanent crutch.
Invoice financing
Best for: a business whose cash is genuinely stuck in its debtors — work delivered, invoice issued, customer on 60 or 90 day terms.
Shape: an advance against invoices already raised, so payroll and suppliers are not waiting on your customer’s payment cycle. It scales with your sales rather than with your balance sheet.
How to tell which one you need
- Is the gap recurring and small? Overdraft.
- Is the cash already earned but not yet collected? Invoice financing.
- Is it a defined, larger need with a repayment plan? Working capital loan.
- Is it all three at once? That is a structuring conversation, not a product pick.
In practice they are often combined
Businesses rarely have exactly one shape of problem. A term facility for the planned need and a revolving line for the unpredictable one is a common structure. Which combination suits you depends on your financials, your existing facilities and each lender’s appetite. We arrange nine facility types and the right combination comes out of the assessment.
Talk to us about your case
Every business is different, and the only honest way to answer “can we get this funded” is to look at your numbers. Send us your company name, roughly how much you need and what it is for, and we will tell you whether there is a case worth building. Speak to us, or read how it works.
Cornerstone Capital Services Pte. Ltd. (UEN 202622107K) is a business financing consultancy and is not a bank or a licensed moneylender. Loan approval, final quantum, tenure and interest rates are determined solely by the participating financial institutions and are subject to their credit assessment. Scheme figures shown are published by Enterprise Singapore and may change.
